(Adds details on deal, background)
SYDNEY, April 13 (Reuters) - Australia's foreign investment watchdog has cleared Chinese- backed coal miner Yancoal Australia Ltd YAL.AX to pursue its $2.45 billion acquisition of Rio Tinto 's RIO.AX RIO.L Coal and Allied Division, Yancoal said on Thursday.
The approval by Australia's Foreign Investment Review Board (FIRB) marked a critical milestone for Yancoal, representing the government's support for investment in the resources sector, Yancoal said.
Yancoal said it expects to complete the deal in the third quarter of 2017. Its purchase of the Rio Tinto coal assets had not led to any political controversy in Australia.
FIRB has yet to approve a A$7.37 billion bid for utility firm DUET Group DUE.AX led by Hong Kong's Cheung Kong Infrastructure Holdings (CKI) 1038.HK .
DUET's assets include a state electricity grid. CKI and China's State Grid Corp last year had their bid for a larger state electricity grid, Ausgrid, rejected by the Australian government based on unspecified national security concerns.
Australia in January set up a new body to vet foreign investment in critical infrastructure assets, which include power grids but not coal mines.